AbbVie Stock Rises 16% Year to Date: Time to Buy, Sell or Hold?

AbbVie ABBV stock has gained 16.1% so far this year compared with an increase of 4.0% for the industry. The stock has also outperformed the sector and the S&P 500 index, as seen in the chart below. The stock is also trading above its 50-day and 200-day moving averages.ABBV Stock Outperforms Industry, Sector & S&P 500Image Source: Zacks Investment ResearchAbbVie has successfully navigated the loss of exclusivity (LOE) of its blockbuster drug, Humira, by launching two other successful new immunology medicines, Skyrizi and Rinvoq, which are performing extremely well, bolstered by approvals in new indications and should support top-line growth in the next few years.AbbVie expects to return to robust revenue growth in 2025 following the Humira LOE. AbbVie has been on an acquisition spree lately in its core space of immunology. However, the company faces several near-term headwinds like Humira’s biosimilar erosion, increasing competitive pressure on cancer drug, Imbruvica, and a slow market growth trend for Juvederm fillers in the United States and China.Let us discuss these factors in detail to understand how to play the stock amid the price increase this year.ABBV’s Successful New Drugs — Skyrizi and RinvoqAbbVie lost patent protection for Humira in the United States in January 2023 and in the EU in 2018. Humira's sales are declining due to the loss of exclusivity and biosimilar erosion. However, with approvals for many new indications, sales of Skyrizi and Rinvoq have successfully replaced Humira, which once generated more than 50% of its total revenues.Skyrizi and Rinvoq generated combined sales of $17.7 billion in 2024. The drugs are seeing strong performance across all their approved indications, especially in the popular inflammatory bowel disease (IBD) space, which includes two conditions — ulcerative colitis (UC) and Crohn’s disease (CD). Importantly, Skyrizi and Rinvoq have demonstrated compelling head-to-head data against several novel therapies in clinical studies, which have given them a competitive advantage.AbbVie expects to record combined Skyrizi and Rinvoq sales of more than $31 billion in 2027. Strong immunology market growth, market share gains and momentum from new indications, such as the recent launch of Skyrizi in UC, as well as the potential for five new indications for Rinvoq over the next few years, are expected to drive these drugs’ growth.ABBV Boasts an Attractive PipelineAbbVie has several early/mid-stage pipeline candidates with blockbuster potential. The company expects several regulatory submissions, approvals and key data readouts in the next 12 months.ABBV has an exciting and diverse pipeline of promising new therapies in blood cancers and solid tumors like ABBV-383, a BCMA CD3 bispecific (relapsed/refractory multiple myeloma) and Temab-A (metastatic colorectal cancer). Teliso-V, a promising c-Met ADC, is under review in the United States for nonsquamous non-small cell lung cancer, with an approval decision expected in the first half of 2025.Studies are also ongoing to evaluate new indications for Botox and Juvederm collection of fillers.AbbVie on an Acquisition SpreeThe company has been on an acquisition spree in the past couple of years, which is strengthening its pipeline. It has signed several M&A deals in the immunology space, its core area, while also signing some early-stage deals in oncology and neuroscience areas. It has inked more than 20 early-stage deals since the beginning of 2024, including promising technologies and innovative mechanisms that can elevate the standard of care in immunology, oncology and neuroscience. Last month, AbbVie in-licensed rights to develop a phase I candidate, GUB014295, a long-acting amylin analog for the treatment of obesity from Danish biotech Gubra. The deal marked AbbVie’s entry into the obesity space, dominated by Eli Lilly LLY and Novo Nordisk NVO.ABBV’s Slowing Aesthetics Sales & Humira ErosionSales of AbbVie’s blockbuster drug Humira are declining due to biosimilar erosion. Humira volume is rapidly eroding compared to other novel mechanisms (including Skyrizi and Rinvoq). The decline is expected to be sharper in 2025 as more plans exclude branded Humira and move to exclusive biosimilar contracts.AbbVie is witnessing declining sales of Juvederm fillers in the United States and China due to challenging market conditions. The slowing growth of the U.S. facial injectables market and persistent economic headwinds, which are affecting consumer spending in China, are hurting Juvederm's sales due to its higher price point. Juvederm sales declined 14.6% in 2024.ABBV’s global sales of aesthetics portfolio declined 0.6% in 2024. On the fourth-quarter conference call, AbbVie also lowered its guidance for its aesthetics franchise’s long-term growth. It expects a high single-digit CAGR for this franchise through 2029. This guidance translates to a little more than $7 billion, much lower than the previous expectation of more than $9 billion for 2030.ABBV Valuation and Estimate RevisionFrom a valuation standpoint, AbbVie is not very cheap. Going by the price/earnings ratio, the company’s shares currently trade at 16.21 forward earnings, slightly lower than 16.28 for the industry. The stock is cheaper than some other large drugmakers like Eli Lilly and Novo Nordisk but priced much higher than most other large drugmakers. The stock is also trading above its five-year mean of 11.88.ABBV Stock ValuationImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for 2025 earnings has risen from $12.18 per share to $12.30, while that for 2026 has increased from $13.69 to $13.97 per share over the past 60 days.ABBV Estimate MovementImage Source: Zacks Investment ResearchStay Invested in ABBV StockAbbVie faces its share of headwinds, such as Humira biosimilar erosion, increasing competitive pressure on cancer drug Imbruvica and declining sales of Juvederm fillers. It also faced some key pipeline setbacks in 2024.However, AbbVie has faced its biggest challenge — Humira’s patent cliff — quite well and looks well-positioned for continued strong growth in the years ahead. The company saw a rapid return to sales growth in 2024 after revenues declined in 2023 due to Humira LOE, driven by its ex-Humira platform. AbbVie’s ex-Humira drugs rose around 19% (on a reported basis) in 2024, exceeding its internal expectations.Boosted by its new product launches, AbbVie expects to return to robust mid-single-digit revenue growth in 2025 with a high single-digit CAGR through 2029, as it has no significant LOE event for the rest of this decade. A substantial portion of this growth is expected to be driven by robust performances from Skyrizi and Rinvoq.Rising estimates for AbbVie, its solid pipeline and the prospect of growth in 2025 sales and profits are good enough reasons to stay invested in this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report AbbVie Inc. (ABBV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks